Millennials can open the door to LTC coverage for parents
Long-term care coverage has been a hallmark of older employee appeal, but some brokers and insurers are looking to millennials as potential clients in an effort to broaden the market. EBA spoke with Brian Harrington, senior vice president, head of distribution, group-long term care at Genworth Financial, about convincing younger clients to plan for end-of-life care, how technology can play a role in LTC and the most common disease covered by the insurance. What follows is an edited transcript of the conversation.
EBA: Tell us about your client base.
Brian Harrington: We have brokers around the country. We work with the larger players, such as Mercer, and we'll work with the more regional firms and advisers. We have about 180 group cases on our books and they range from small colleges to Fortune 50 banks. We tend to be a little selective in the in the groups that we decide to underwrite because we don't tend to underwrite very high-risk types of employees. For instance, if an airline asked us to cover their employees, we would likely say that's probably not a good risk profile for us. There's a lot of manual-type of labor that goes on with the baggage handlers and the folks working on the plane. But we would do a carve-out where we could say we'll take the executives or subgroup of management or maybe other white-collar type of employees.
EBA: What age groups are signing up for LTC? Do millennials completely bypass it?
Harrington: Yes, the baby boomers [are the main client base] today, but you start to see more Gen Xers. Our target market today is somewhere between that 52 to 65 years old. We’ll write some people who are older than 65, but our experience has been that most participation comes from that 50 to 65 age group. Once in a while, we'll get somebody who's in their mid-40s but it'd be very rare for us to sign on somebody in their 20s.
We actually just did write a California-based technology company and it was almost all Millennials as you would expect in some of these more tech-savvy shops. We did get some participation. Some of the employees realized that while they were young and healthy, this was probably the least expensive of this type of insurance was ever going to cost them. They were obviously in a more higher-paid type of demographic so there we did get some participation.
We can offer care to other family members, so in that particular instance, we had many of those millennials’ parents apply for coverage. The fact that they were getting this through their son or daughter's workplace ... they were getting that group pricing as well as the group underwriting concession.
EBA: What are some of the LTC conditions that people are covering?
Harrington: Most of our claim experience tends to occur when people are 70 to 75 or older and it's more long-term care. The No. 1 thing that folks claim for is Alzheimer's. What is interesting about Alzheimer's is you can live with it for a long time.
We will get people accessing their long-term care at a younger age and it might be for things like a motorcycle accident or falling off a horse, but they typically end up getting better and going back to work. The vast majority of our claims are going to be in that older age demographic when they need in-home care or some sort of facility care.
EBA: Are clients and brokers asking for high-tech gadgets that connect to their doctor or having their vital signs beamed over to their healthcare provider?
Harrington: There may be, but it's not something we currently provide. We hear a lot about how technology is going to help folks to live obviously longer or help them live longer in their home, which is the obvious preference for folks. We do have a sister company called Carescout that offers an in-home assessment for folks before they go on claim and they also do a survey-provided service that helps you find a facility for long-term care.
EBA: Is there confusion about what Medicare and Medicaid would cover with LTC?
Harrington: We often are asked this. There is a misperception that when people get older and sick that Medicare will cover this. Medicare was really designed not for the long term. It was only designed for a certain period certain and those benefits don't extend to nursing home care, for instance.
A huge part of LTC obviously is asset protection. If folks do get sick and they don't have some sort of coverage, they need to know that Medicare is only going to pay for the shorter duration of care. Then they are going to have to dip into their savings or their pension to pay for their long-term care. That's why we encourage folks to think about it as early as possible and make it part of their retirement planning discussions.